Texas billionaire businessman Tilman Fertitta said he had done his 45,000 employees a ‘favor’ by laying them off, as their early furlough allowed them to get to the front of the unemployment line.
The Houston Rockets owner, who is the 44th wealthiest person in the world, told FOX News’ guest host Brian Kilmeade on Saturday that he had learned from previous economic downturns that it was best to furlough staff early.
He also confirmed that he has secured a $250million dollar loan at 12 percent to keep his company afloat.
Fertitta, who is worth an estimated $4.8billion, also owns the Golden Nugget casino chain and the Landry’s portfolio of restaurants, including 600 properties across 30 states and 15 different countries.
He said the hit of the coronavirus shutdown to his hospitality empire had been crippling and that the country must begin to open up again in early May both for the economy and for the nation’s mental health.
Billionaire businessman Tilman Fertitta told Fox News on Saturday that he had done his 45,000 employees a ‘favor’ by laying them off early as they would be the first in the unemployment line
Fertitta is the owner of the Houston Rockets and the 44th wealthiest person in the world
Fertitta was forced to furlough ten of thousands of employees as his casinos and restaurants lie empty amid the shelter-in-place orders across the country.
‘I’m holding up, he told Kilmeade, ‘but I’ve got 45,000 employees out there that we’ve had to furlough and it’s so unfortunate but we’ve got to get back to work as soon as we can.
‘These unemployment numbers – 16 million – and there’s no telling what it’s going to be next week, that’s what’s so sad about this whole crisis.
‘You know, Brian, I went through the ’87 crisis, the 2000, the 2008,’ he added.
‘You’re doing your people a favor if you get them furloughed first, because they’re the first to the unemployment line after the severance that you give them.
‘It’s a trick that I learned many years ago.’
Fertitta compared the coronavirus pandemic to a sci-fi movie as he revealed that he is still burning through up to $2million a day to keep his company going, despite the mass closure of his businesses.
He has also paid out some $100million in severance to employees.
Tilman Fertitta spoke to FOX News’ guest host Brian Kilmeade about the crippling effect of the coronavirus pandemic on his company as he was forced to furlough 45,000 workers
‘It’s just unimaginable,’ Fertitta said.
‘We’ve all had to do little layoffs over the year. But you have to basically shut down the whole company. When you think of having amusement parks, aquariums, a basketball team, casinos all over the world—and nothing is open. It’s just like a sci-fi movie you’d never believe.
‘This is what people don’t understand, is that we all pay today, yesterday’s bills with today’s money,’ he continued.
‘And when we just got shut down in a 48-hour period, you still have a payroll and severance, $100 million for me because my payroll is $1.5 billion a year.’
The restaurateur told Fox that the economy had to open up again in early May for people’s mental health but added that the shutdown must continue until it was sure the worst of the outbreak was over.
Fertitta is also the owner of the the Golden Nugget chain of casinos which remain closed across the country because of the shelter in place orders under the coronavirus pandemic
The Golden Nugget in Atlantic City. Texas billionaire businessman Tilman Fertitta is the owner of the chain that has been forced to close. Fertitta has furloughed 45,000 staff
He added that he had studied the waves of infections of the Spanish Flu and that the country could not afford to close down a second time if it were to open back up too early.
The Houston, Texas, based businessman said he believed the closure of the city was premature when it first happened but that he now thinks it was the right move.
‘But they were 100% right, and we’ve got to do this to the end of this month, and we’ve got to start opening up in May, not only on the financial side, but on the mental health side is huge,’ he said.
‘I talk to so many people who say I just need to get back to work, I’ll do anything, I just need to get out of my house.
Houston remains empty of traffic during the shutdown. Fertitta said he did not initially agree with the closures but now believes it was needed but wants openings to start in May
‘One we get back we’ve got to stay back but it will be a few year before we’re back to normal,’ he warned, adding that his company were to make changes to encourage an early opening of their businesses, such as removing salt and pepper and things that people touch from tables and buying masks for all kitchen staff.
Fertitta confirmed that he had acquired an astounding 12 percent interest loan in the past week to ensure that his business would stay afloat, as well as injecting $50million of his own finances into the company.
‘We have to have the insurance. None of us have an idea how long this is going to last,’ he said of the gigantic loan.
According to Bloomberg, Fertitta was looking for a $250million loan to keep his casino and restaurant empire afloat.
The businessman had initially offered potential lenders an interest rate of at least 15 percent but he told Fox this had been brought down to 12 percent because the interest in the offer was so great.
The loan, which matures in October 2023, was being arranged by Jefferies Financial Group Inc after the company had drawn $300 million of existing credit lines in full as well as Fertitta’s own $50million personal contribution.
In the past three weeks, more than 16 million Americans have filed for unemployment, with lockdown orders causing the closures of tens of thousands of businesses.
Based on unemployment claims filed this week, the New York Times estimates the US unemployment rate is now around 13 percent, and set to bloom from there.
Coronavirus cases in the United state hit over 534,000 with 20,647 deaths on Saturday.